As China's
smartphone-based e-commerce boom is rapidly spreading to the food sector, the
food consumption culture of Chinese people is gradually changing.

According
to a report titled “The Food Delivery Service Market Trends in China” issued by
the Beijing Branch of the Korea International Trade Association (Chairman, Kim
Young-joo), the Chinese food delivery market has grown by 50.3 percent annually
in recent years, reaching 166.2 billion yuan in 2016. In particular, it is only
4.6 percent of China's total catering market of 3.58 trillion yuan in 2016, and
its future growth potential is expected to be even higher. The number of
Chinese food delivery service users is expected to exceed 300 million this year
from 206 million in 2016.

Chinese
food delivery service is mainly focusing on inexpensive food for busy workers.
According to a survey conducted by China’s iiMedia Data, in terms of the monthly salary of food
service users, 65 percent makes 3,000 ~ 8,000 yuan, while only 7 percent earns
over 10,000 yuan. Regarding food prices, 16 to 35 yuan was the most popular
(63%) price range, while only 4 percent was over 56 yuan. In addition, it
appears that the reason for using the delivery service is to shorten the meal
time and the speed of delivery is the most important factor in choosing the
food delivery platform. It shows that as the pace of Chinese office workers’
daily lives is becoming faster, they are more concerned about speed when it
comes to eating habits rather than the amount or flexibility of food in the
past.

China's
food delivery service is the oligopoly that three major online platforms,
including Ele.me,
Bidu Waimai andWaimai Meituan, account for 95.9 percent of the
entire market. In particular, it appears that
Alibaba, China's largest e-commerce company, is also dominating the food
delivery service market. Since Bidu Waimai run by Bidu, China’s largest portal
website, was acquired by Ele.me in August, 2017, Alibaba, the largest
shareholder of Ele.me, took up 55 percent of China’s good delivery service
market.

Food
delivery online platform companies are working with various stores, such as
marts and convenience stores and they are expanding its business scope to
provide purchase agency services and errand services for various items,
including daily necessities and fruits. As the delivery infrastructure
associated with the online platform is linked to the offline stores, consumers
are changing their consumption patterns by purchasing everything at home
through online payments and shipping services at home or in the office.

Shim
Yoon-seup at the Beijing Branch of the Korea International Trade Association
said "As the Chinese people's life pace is getting faster and e-commerce
using smartphones is expanding. Thus, the food distribution in China is
shifting from visiting restaurants (stores) in the past to online-oriented
consumption.” He
also added "China's distribution ecosystem is changing around the online
platform and its supporting shipping infrastructure."